Human Resource Management (HRM)

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Human Resource Management (HRM)
BA in MBA III.
HRM strategies and HR Planning

• András Kun
• University of Debrecen Faculty of Economics and
  Business Administration

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Readings

• Textbook chapters 7, 8 25 (without action
  planning in 25)

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Strategy

• The direction and scope of an organization over
  the long term.
• It should match the resources of the organization
  to its changing environment (markets, customers
  and other stakeholders).
• Strategy determines the direction where the
  organization is going

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The stakeholders (figure from Wikipedia)
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The concept of strategy

• It is a long term plan
• It is the pattern of the organizationss behavior
  over time it provides consistency
• It is a perspective a fundamental way of doing
  things (mission)
• A ploy a specific manoeuvre to outwit a
  competitor

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The concept of strategic management

• Vision and mission
• Strategic goals (expression of strategy)
• Strategic plans (development and implementation
  of st.)
• Implementing the strategy
• (business strategy via functional strategies)
• Managing strategy itself (goals, plans,
  implementation)

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Strategic fit in 3 senses

• Capabilities and resources to the environment
  (opportunities and threats)
• The business (or corporate) strategy to
  functional strategies and strategies of business
  units
• Every part of the strategy area should be
  mutually supportive

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Strategic HRM (SHRM) vs. HRM

• A strategic approach to HRM
• Focus on
• (Business) strategy
• Integration
• Coherence
• It plans, not only reacts (HRM strategy is
  vertically integrated with business strategy)
• People are strategic resources ( human capital
  approach)
• It is both integrated and integrative (focuses
  on strategic fit)
• Strategic decision making (long-term impact on
  success)

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HR strategies (as part of HRM)
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An ideal HR strategy

• satisfy the needs of the business strategy
• guides HRM development and programms
• is founded on detailed analysis
• can be turned into actionable programmes
• is coherent and integrated
• takes account of the needs of line managers,
  employees and other stakeholders

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An HR strategy can be

• Overarching (general)
• Specific focuses on specific areas
• Talent management
• Human resource development
• Reward management

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Human resource planning
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Definition of HR planning

• The process for ensuring that the human resource
  requirements of an organization are identified
  and plans are made for satisfying those
  requirements.
• It is generally concerned with matching
  resources to business needs on the longer term
  and sometimes on the shorter term (operative
  planning).
• Two main questions
• How many people (quantity)
• What short of people (quality)

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As an integrated part of business planning it has
to adapt

• Changes in environment and activities
• Core competences
• Skill and work requirements
• Motivational requirements and possibilities
• Focus on specific areas if it is needed
• HR plan is interpreting the business plan in
  terms of personnel issues

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Hard soft HR planning

• Hard ( manpower planning)
• quantitative analysis
• right number of the right short of people
• Soft
• Right attitudes and motivation
• Commitment and engagement
• Behavior culture

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A shift from simple manpower planning

• Reconciling numbers of employees predictable
  stable jobs (quantity)
• Skills, competency development (quality)

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Classic 3 steps model

• Demand forecasting (future jobs)
• Supply forecasting (people)
• Plans to match supply and demand
• Complexity and continuous changes
• Skills and competences instead of number of
  workers

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Managers dont like HR planning

• Difficulties of predictions
• Priorities and strategies are also changing
• Distrust they simply dont like theory or
  planning but pragmatic solutions
• Lack of evidence that it works

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Evidence on the benefits

• Planning for substantive reasons
• Supporting decisions
• Identifying potential problems
• Optimizing resources
• Benefits from the planning process
• Understanding the HR processes
• Planning for organizational reasons
• Linking HR to business plans
• Regaining control over operating units
• Coordinating decision making

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Aims of HR planning

• Attract and retain the number of people required
  with the appropriate skills
• Anticipate the problems of potential surpluses or
  deficit of manpower
• Development goals
• Reduces dependence on external factors (like
  external recruitment)
• Designing work systems to be more efficient
  (utilization)

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Process of HR planning

• Its non-linear (feedbacking, replanning)
• Strategy is more likely to be evolutionary than
  deliberate

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The place of HR planning in the hierarchy of
planning
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Forcasting and analysis

• Macro and micro environment especially labor
  market
• Labor turnover analysis actual and trends (part
  of supply forecast)
• Work environment analysis skill development and
  job satisfaction
• Operational effectiveness analysis productivity,
  utilization, fexibility

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Methods of forecasting

• Subjective
• Expert judgment
• Using team techniques
• Objective
• Ratio trend analysis (statistics)
• Work study techniques

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Labor turnover

• It is costly
• Money administration, replacement (recruiting
  training), opportunity cost of managing the
  leavings, decreasing productivity before leaving,
  productivity loss during the training of the
  replacement
• Impact on the work environment
• It is normal (it should be measured and
  forcasted)

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Usual reasons for quit

• Payment
• Career
• Job security
• Skill development
• Work conditions
• Poor relationship with the boss
• Harassment
• Personal (not connected to the firm)

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Measuring labor turnover

• Indices
• Labor turnover index ( of the average number of
  workers)
• Survival rate ( of the total entrants in a
  certain period)
• Half-life index (time taken to reducing a cohort
  to the half of its original size)
• Stability index (those who had at least 1 yr
  service / those employed 1 yr ago) focusing on
  continuity
• Length of service analysis (ratios of groups with
  different service levels, average service time,
  average service time of the leavers, etc.)
• Analysing reasons of leave (exit interview)
• Benchmarking turnover

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Calculation of labor turnover index

• Number of separations in a month 9
• Average employees in the same month 50

• Solution 18

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Typology of turnover

• Total incoming leaving
• Reasons controlability

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• Thank you for your attention